Amenities alone won’t guarantee tenant retention

Human interaction is an important component of exceptional customer service. Here, security guard Sean Finn assists Amy Schroeder from 5 Star Bank, a tenant at One DTC. Courtesy Alyssa Teboda, Transwestern

Lee Wallis
Managing senior vice president, Transwestern

As Yogi Berra said, “The future ain’t what it used to be.” In the competition to attract tenants, commercial real estate owners constantly are reaching for what’s next in building amenities and space activation. What’s hip? What’s cool? What’s the latest gadget, app or touchscreen technology? Building owners are always looking for the shiny new toy that captures tenant interest to drive and maintain occupancy.

The list of options is endless and limited only by the amount of money an owner is willing to spend. New technologies such as robotic greeters and electronic key apps that allow users to open doors with their smartphones are becoming more prevalent in office environments. The overarching idea is that buildings are being judged on their cool factor. The expectation has been that the 21st century work environment must continually be modified to embrace the newest fads, apps and tech toys.

Commercial real estate owners have recognized that the workplace is now a multifaceted world. It is no longer a square box containing neat rows of cubicles occupied by a drone workforce. Building owners must accommodate the needs of individuals in addition to the needs of companies – and, ideally, in a way that generates a healthy return on investment.

Studies indicate that the workplace now is expected to be a blend of tasks, fun and socialization. Work environments are becoming on-demand rather than the traditional 8 a.m. to 5 p.m. model. Employees are more mobile and flexible with work hours and locations. In today’s world, the work follows the worker, and 24/7 connectivity is the norm.

To create more social environments and experiences, building owners are discovering ways to activate both indoor and outdoor public spaces in buildings with features like zen gardens, putting greens, bocce ball, outdoor fire pits, gas grills, pool tables, Ping-Pong and oversized chess boards with expanded Wi-Fi capability throughout the interior and exterior collaborative space. These types of amenities have been shown to help tenants attract and retain a quality workforce.

The traditional building delicatessen is as passé as the abacus. It has been replaced with boutique coffee shops, grab-and-go health food options and snazzy kiosks selling farm-to-table salads and boba teas. As the percentage of millennials in the workplace continues to increase, followed closely by Generation Z, buildings now must have a fun factor and provide an experience to differentiate themselves from the competition.

While amenities and technology certainly have their place in commercial office spaces, there is one element of commercial real estate that can’t be downloaded or achieved with an app. It’s the timeless art of exceptional customer service. It’s the security guard who remembers your name and says, “good morning” each day; it’s the building engineer who notices a burned-out light bulb and replaces it before being called; and it’s the property manager who keeps track of your birthday and stops by with fresh-baked cookies to celebrate. Yes, those little things still matter and they matter a great deal to the occupiers of commercial properties.

The numbers back this up. Institutional owners of real estate spend a great deal of time and effort gathering data in tenant surveys to dissect and determine what makes – and keeps – their tenants happy. Time and time again, the results indicate that tenants rate high-touch, high-quality property management as a top factor in their satisfaction and willingness to renew their lease when the time comes.

Factors such as the ability to have instant access to building staff and quick response time to maintenance requests always rank high on the tenant wish list. Can that response time be enhanced with mobile app technology? Of course. But humans must carry out the personal interaction that creates an extraordinary experience for the tenant.

Deploying innovative building amenities and technology is exciting and can greatly improve building aesthetics and operational efficiencies. But remember, even your smartphone is useless without the human touch. Understanding how to meld these complementary dynamics will result in the best possible tenant experience.

Featured in CREJ’s July Property Management Quarterly.

Edited by the Colorado Real Estate Journal staff.